It’s been a pretty wild few sessions for US equities and it doesn’t look like the volatility is going anywhere soon. As if the results of
the presidential election weren’t enough for Wall Street to be chewing on this week,
Pfizer’s (NYSE: PFE) announcement yesterday has only served to add fuel to the fire.
The first preliminary results from their Phase 2/3 trial, which is evaluating their COVID-19 vaccine candidate and run in partnership with BioNTech (NASDAQ: BNTX), hit the headlines on Monday and caused quite the stir. It looks like it’s about 90% effective and no safety issues were identified. Between this good news and the removal of the overhanging uncertainty from the US election, stocks had one of their best days in months. Unsurprisingly, many individual names that have been hit hard by the coronavirus just got a whole lot more attractive.
Monday’s news helped to send shares of luxury department store company Nordstrom up by as much as 30% at one point and took them off the decade lows they’d been trudging along in over the past few months. As a brick and mortar focused retailer, Nordstrom has suffered big time from the coronavirus driven lockdowns that have sent consumers to those retailers better prepared for e-commerce. With growing hopes of a return to at least something like the old normal, Wall Street will be on the hunt for companies who stand to do well if that happens.
A fresh upgrade from Telsey Capital Markets certainly helped with the pop in shares as they were moved to Outperform from Market Perform. In a note to clients, they said "we are upgrading Nordstrom to Outperform as Nordstrom's differentiated business model is pivoting toward offense — an attractive position in which to gain profitable market share — while being bolstered by its strong financial position. In addition, the stock has underperformed vs. its peer group, resulting in what we perceive as an attractive entry point and valuation."
With shares still down more than 60% from their pre-COVID levels, there’s a lot of ground to be made up.
The restaurant sector was on the front line of industries that got hit hard by the initial wave of COVID-19 in March. Within a number of weeks Papa John’s shares found themselves down more than 50% and at multi-year lows. However, they were able to pivot remarkably well to the home delivery space and shares ran up to all time highs in August. Since then though they’ve cooled significantly and are off those highs by about 25%.
Monday’s vaccine update will breath a new lease of life into an industry that’s been crying out for some good news all year. On top of that, the folks over at Deutsche Bank are also getting bullish on Papa John’s stock and they upped shares to a Buy rating from Hold yesterday.
In a note to investors, they pointed out “as it stands today, the narrative on the stock largely revolves around whether or not Papa John’s domestic same store sales will inevitably decelerate meaningfully from here, leading to potentially negative comps for at least a few quarters next year as it laps particularly tough COVID compares."
They also slapped a fresh price target of $91 onto shares which suggests upside of about 20% from Monday’s closing price.
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